UBS Raises Broadcom Price Target to $290

UBS analyst Timothy Arcuri raised the price target on Broadcom Limited (NASDAQ: AVGO) to $290 (from $270) while maintaining a Buy rating.

“The AI demand commentary on the call was very bullish and out-year growth commentary supports C2026 revenue a good ~10% higher than Street into this call.

This further bolsters our view that C2026 EPS is tracking toward ~$9 with ~$10 likely in C2027.

The issue near-term though is that investor expectations are already in this range (with some even higher for C2027) so we don’t expect a big upward move off what was otherwise a very positive set of results.

On top of this, the gross margin guidance seems to imply a material step-down in margins for Google TPU as v6p ramps.

Beyond the near-term, AVGO is likely to win on multiple fronts as hyperscaler customers look to create large heterogeneous compute clusters using either custom ASIC (the vast majority of which we think will be made by AVGO) or AMD alongside NVDA GPUs.

AVGO’s opportunity to link this all together using Ethernet should also scale alongside these solutions and AVGO also benefits from scaling out from cluster to cluster given its existing dominance in this market.”

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